Employment Practices Liability (EPL) Insurance

What is Employment Practices Liability Insurance?

Employment Liability Insurance | Insurance AdvisorsEmployee Practices Liability Insurance is a fairly new form of liability insurance. It provides protection for an employer against claims that are made by employees, former employees, or potential employees. It covers sexual harassment, wrongful termination of employment, discrimination (age, sex, race, disability, etc.), and other employment-related allegations. It covers your firm including the Directors and Officers.

When is Employment Practices Liability Insurance needed?

Insurance is needed as soon as you start to hire employees. Directors and Investors often require that you have this coverage as a part of your Directors and Officers Liability Insurance since they too can be held liable in suits regarding to employee practices.

Why is Employment Practices Liability Insurance needed?

Cases against employers are on the rise so it is important to protect yourself in the event of a suit. It is estimated that 3 out of 5 firms will be sued by an employee. Companies are vulnerable from the pre hiring process through the exit interview, even if that employee was never hired, or only with the company for a short period of time. This can happen to any firm, everyone has heard about such situations. Every employer can be the target of legal action from the past, present, and prospective employees. Even if the claim is minor or fraudulent the defense of a suit can be costly over time, financially and in resources. The most vulnerable to these types of claims are new technology firms along with fast growing companies due to their management teams not having yet designed or implemented proper procedures for hiring, firing, and disciplining employees.

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By: Niklas Almström